ASIC regulatory update

The Australian Securities and Investments Commission (ASIC) recently released changes to current regulations surrounding CFD products for retail clients.

You can read ASIC's announcement here.

What are the changes?

The changes released by ASIC include:

  • Leverage ratio limits

    • 30:1 for CFDs referencing an exchange rate for a major currency pair
    • 20:1 for CFDs referencing an exchange rate for a minor currency pair, gold or a major stock market index
    • 10:1  for CFDs referencing a commodity (other than gold) or a minor stock market index
    • 2:1 for CFDs referencing crypto-assets
    • 5:1 for CFDs referencing shares or other assets
  • Margin close-out percentages - standardise CFD issuers’ margin close-out arrangements that act as a circuit breaker to close-out one or more a retail client’s CFD positions before all or most of the client’s investment is lost
  • Negative balance protection - protect against negative account balances by limiting a retail client’s CFD losses to the funds in their CFD trading account
  • Promotional offers - prohibit giving or offering certain inducements to retail clients (for example, offering trading credits and rebates or ‘free’ gifts like iPads).

These changes are due to come into effect from 29 March 2021.

What does this mean for Australian CFD & Binary Options traders?

The changes proposed by ASIC are similar to regulations already implemented in other regions including the UK and Europe. 

Benefitting from our proprietary technology, we are well prepared to respond quickly in managing the regulatory changes

At this stage, there is currently no impact on trading for CMC Markets clients but we will look to communicate any timelines and its impact on trading as a matter of priority.

As always, we will continue to deliver our award-winning education tools, platform and customer service to ensure our traders have the support and knowledge they need to trade the financial markets.

CMC Markets Statement

CMC Markets believes in a consistent approach to regulation, which provides a level playing field and raising standards across the industry. Fair outcomes for clients have always been a focus for us.

We welcomed the opportunity to work with ASIC during the consultation period to ensure the industry acts in the best interests of Australian consumers and are supportive of ASIC’s proposed changes which are due to be implemented from 29 March 2021.

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Investment Trends Australia Leverage Trading Report

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Investment Trends Australia Leverage Trading Report

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Investment Trends Australia Leverage Trading Report

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^By own client ratings. Investment Trends 2018 Australia Leverage Trading Report, based on a survey of over 18,000 traders and investors

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